Correlation Between Cheryong Industrial and Jeju Beer
Can any of the company-specific risk be diversified away by investing in both Cheryong Industrial and Jeju Beer at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Cheryong Industrial and Jeju Beer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cheryong Industrial CoLtd and Jeju Beer Co, you can compare the effects of market volatilities on Cheryong Industrial and Jeju Beer and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Cheryong Industrial with a short position of Jeju Beer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cheryong Industrial and Jeju Beer.
Diversification Opportunities for Cheryong Industrial and Jeju Beer
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Cheryong and Jeju is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Cheryong Industrial CoLtd and Jeju Beer Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeju Beer and Cheryong Industrial is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Cheryong Industrial CoLtd are associated (or correlated) with Jeju Beer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jeju Beer has no effect on the direction of Cheryong Industrial i.e., Cheryong Industrial and Jeju Beer go up and down completely randomly.
Pair Corralation between Cheryong Industrial and Jeju Beer
Assuming the 90 days trading horizon Cheryong Industrial CoLtd is expected to generate 0.88 times more return on investment than Jeju Beer. However, Cheryong Industrial CoLtd is 1.13 times less risky than Jeju Beer. It trades about -0.42 of its potential returns per unit of risk. Jeju Beer Co is currently generating about -0.9 per unit of risk. If you would invest 616,000 in Cheryong Industrial CoLtd on December 30, 2024 and sell it today you would lose (88,000) from holding Cheryong Industrial CoLtd or give up 14.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cheryong Industrial CoLtd vs. Jeju Beer Co
Performance |
| Timeline |
| Cheryong Industrial CoLtd |
| Jeju Beer |
Cheryong Industrial and Jeju Beer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cheryong Industrial and Jeju Beer
The main advantage of trading using opposite Cheryong Industrial and Jeju Beer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cheryong Industrial position performs unexpectedly, Jeju Beer can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Jeju Beer will offset losses from the drop in Jeju Beer's long position.| Cheryong Industrial vs. Value Added Technology | Cheryong Industrial vs. MS Autotech CoLtd | Cheryong Industrial vs. Paratech Company Limited | Cheryong Industrial vs. KMH Hitech Co |
| Jeju Beer vs. Digital Multimedia Technology | Jeju Beer vs. Alton Sports CoLtd | Jeju Beer vs. Woori Financial Group | Jeju Beer vs. Industrial Bank |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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